Avanos Medical Reports $76.8 Million Net Loss in Q2 2025 Amid Restructuring Efforts

Avanos Medical, Inc. reported a net loss of $76.8 million for the second quarter of 2025, a significant decline from a profit of $1.8 million in the same period last year. The company's revenue for the quarter was $175.0 million, reflecting a 1.9% increase compared to $171.7 million in the second quarter of 2024. For the first half of 2025, Avanos recorded a net loss of $70.2 million, compared to a profit of $0.9 million in the first half of 2024, with total revenue rising to $342.5 million from $337.8 million year-over-year.

The financial downturn was primarily attributed to a $77.0 million goodwill impairment charge related to the Pain Management and Recovery segment, which was assessed following a decline in the company's market capitalization. This impairment significantly impacted the operating income, which fell to a loss of $74.5 million for the quarter, compared to an operating income of $6.3 million in the prior year. The company also reported increased costs in both cost of goods sold and selling and general expenses, which were driven by higher tariffs and restructuring costs associated with its ongoing transformation initiatives.

In terms of operational developments, Avanos has been undergoing a restructuring process initiated in January 2023, aimed at aligning its organizational structure and rationalizing its product portfolio. The company has transitioned to managing its operations through two reportable segments: Specialty Nutrition Systems and Pain Management and Recovery. The Specialty Nutrition Systems segment saw a 5.1% increase in net sales to $102.7 million, driven by strong demand for enteral feeding products. Conversely, the Pain Management and Recovery segment experienced a modest 2.9% increase in sales to $61.0 million, with a notable 13.7% growth in radiofrequency ablation solutions, although surgical pain and recovery products saw a decline.

Geographically, Avanos reported that North America accounted for the majority of its sales, totaling $138.5 million in the second quarter, a 1.4% increase from the previous year. The company also noted a significant 18.1% increase in sales from the Asia Pacific and Latin America regions. As of June 30, 2025, Avanos had cash and cash equivalents of $90.3 million, down from $107.7 million at the end of 2024, primarily due to debt repayments and capital expenditures.

Looking ahead, Avanos remains focused on completing its restructuring initiatives and enhancing operational efficiency. The company anticipates that the ongoing transformation will position it for improved performance in the future, although it acknowledges the potential risks posed by market conditions, including tariff fluctuations and supply chain challenges. The management's outlook emphasizes a commitment to strategic growth and operational alignment as it navigates these challenges.